Both EPF (Employees’ Provident Fund) and PPF (Public Provident Fund) are long-term savings schemes in India. They help you build a retirement fund—but they’re meant for different people and work very differently.
Think of EPF as job-based savings, and PPF as personal savings.
Quick Comparison Table
| Feature | EPF | PPF |
|---|---|---|
| Full Form | Employees’ Provident Fund | Public Provident Fund |
| Who Can Invest | Only salaried employees in registered firms | Any Indian citizen |
| Account Opening | Through employer | Through bank or post office |
| Contribution | Employee + Employer (12% of salary each) | Self-contribution (₹500–₹1.5 lakh/year) |
| Interest Rate (2025) | ~8.25% (variable) | 7.1% (fixed, revised quarterly) |
| Lock-in/Maturity | Till retirement or job switch | 15 years (extendable in 5-year blocks) |
| Withdrawals | Partial after 5 years or on job change | Partial after 5 years; full after 15 |
| Premature Exit | Limited, with reason | Not allowed fully before 15 years |
| Tax on Deposit | Exempt under Section 80C (₹1.5L limit) | Same – ₹1.5L max under 80C |
| Interest Taxability | Tax-free up to ₹2.5L/year contribution | Fully tax-free |
| Risk | Government-backed, low risk | Government-backed, very safe |
| Best For | Salaried employees | Self-employed, freelancers, students, etc. |
EPF Explained Simply
- EPF is compulsory for salaried employees in companies with 20+ workers.
- You and your employer contribute 12% of your basic salary + DA each.
- You can withdraw partially for house, marriage, education, or emergencies.
- You can transfer your EPF to a new job via UAN (Universal Account Number).
- Interest is tax-free only on employee contributions up to ₹2.5 lakh/year.
PPF in Simple Words
- Anyone can open a PPF account (even children via guardians).
- You invest ₹500 to ₹1.5 lakh per year, for 15 years minimum.
- Safe, government-backed savings with guaranteed returns (7.1% as of now).
- Full withdrawal only after 15 years, but partial withdrawals from the 7th year.
- Entire amount including interest is tax-free.
Tax Benefits Compared
| Tax Element | EPF | PPF |
|---|---|---|
| Section 80C | Up to ₹1.5 lakh | Up to ₹1.5 lakh |
| Interest Taxation | Tax-free up to ₹2.5L contribution | Fully tax-free |
| Maturity Amount | Tax-free if rules followed | Fully tax-free |
Which One Should You Choose?
- If you’re salaried – EPF is automatic and highly beneficial
- If you’re self-employed or student – PPF is your go-to tax-saving tool
- You can invest in both EPF and PPF for double benefits
Final Takeaway
- EPF = For employees. You and your employer save together for retirement.
- PPF = For everyone. You save on your own, with full tax-free interest.
Both are safe, tax-saving tools. Use them smartly for long-term wealth and retirement peace.
